Postcrisis recovery in the regions of Europe: Does institutional quality matter?

This paper investigates how institutional quality and its components (quality, impartiality, and control of corruption) are associated with the economic recovery in the aftermath of the global recession (2010-2016). The evidence suggests that the postcrisis dynamism of a region depends on whether its economy is accompanied by a good governance at the local level. The results also show the heterogeneity in the effects of institutional characteristics and other traditional determinants of growth for the high-income club (core) and the low-income club (periphery), respectively. This evidence can provide indications to define ad hoc policies apt to mitigate the recent surge in inequality among EU regions.